Description

It has been 2 years since Temu first launched in the US and is now one of the leading cross-border platforms with a presence in 78 countries and territories (as of 1st Sep 2024).

Rather than starting with the usual marketplace or retailer model, Temu stood out amongst players with its launch of the full consignment model. The platform’s quick traction and unique model drew a lot of attention and inspired many competitors to create their own.

However, Temu is more than just a full consignment company. In fact, full consignment is just a step in the global expansion plan of a highly flexible and adaptable company, made possible by its distinctive company culture and approach to the value chain.

Purchase Momentum Works’ Temu: 2 years on report to learn more about the insights connecting the dots behind the emerging cross-border ecommerce giant.

The 52-page report covers the following sections:

1. Introduction & overview

• Temu has come a long way … in a very short period of time
• Temu’s global presence as of 1 Sept 2024
• Temu might be very close to, if not already becoming, self-sustaining
• The mixed feelings towards Temu
  

2. Temu’s cold start logic

• Temu decided to start with full consignment – a heavier but safer choice
• Why full consignment?
• A comparison of marketplace vs full consignment models, circa 2022
• Pinduoduo started with a similar logic in China
• Full Consignment: Not the whole story of Temu, just a stage in its evolution
• PDD has shifted battle-hardened executives of Duoduomaicai to focus on Temu
  

3. Temu’s company culture

• The culture of PDD (Temu & Pinduoduo) is unique
• Control, not context sets PDD apart from its peers
• Temu’s Super Bowl debut: case in point of decision-making & execution efficiency
• A few anecdotes of Temu’s culture
  

4. Temu’s value chain

• Temu pioneered full consignment model amongst cross border platforms
• Temu’s consignment models inspired many other platforms to create their own versions
• Key components of the cross-border ecommerce ecosystem
• Temu’s relationship with suppliers
• Crucial question: Why do suppliers want to sell through Temu?
• Why do consumers keep buying from Temu?
• Temu’s relies heavily on third-party logistics to deliver the parcels
• Temu has been exploring options to improve shipping efficiency
  

5. Temu across the world

• Same business model of cross-border sales, adapted approach to fit different markets
  

6. Is Temu sustainable?

• PDD is not over-stretching its resources to operate Temu
• In fact, PDD seems to become more efficient since Temu launch
• Why does Temu contribute more revenue than GMV to the group? 
• Risks and challenges ahead
  

7. What should incumbents do?

• Does Temu pose a threat to Amazon and other incumbents? 
• Alibaba’s internal bulletin board on 29 Nov 2023, just before PDD overtook Alibaba market cap
• How are incumbents responding to Temu’s (potential) threat?
  

8. Conclusion & perspectives